The US And EU Approaches To Critical Minerals And Its Implications For Industry Participants

An Executive Order issued in April 2025 neatly summarised the Trump Administration's view of critical minerals as a vital economic and national security lynchpin for the United States:

Understanding the security import of critical minerals in the view of the Trump Administration, and given US import dependence with respect to critical minerals (e.g., per the US Department of Energy, over 95% of US rare earth demands is foreign (non-US) sourced, with more than half of most critical minerals having a foreign origin, with 12 critical minerals coming exclusively from foreign sources), the Administration's move to localise and increase control over the supply of critical minerals was perhaps unsurprising.

The current trend is seeing the US move towards direct US government funding, public-private partnerships (similar to those observed in the wider energy and infrastructure sectors), and the strategic use of offtake agreements. This is consistent with the models seen in some other jurisdictions for a number of years, such as Japan. Across the Atlantic, the European Union (EU) is trying to pursue its own strategy to address resilience in critical minerals supply chains, mainly through the EU Critical Raw Materials Act (CRMA). It aims to deploy measures that combine industrial policy and market mechanisms to bolster investments in the critical minerals sector. Below we examine the opportunities and legal complexities these new trends will herald for mining companies and industry participants.

Legislation and regulation advancing US investment in critical minerals

Critical minerals – defined in the Energy Act of 2020 as any (non-fuel) mineral, element, substance or material designated as critical by the Secretary of the Interior – were a key focus of the Trump Administration's first term.²

Since President Trump (re)entered the White House in January 2025, the emphasis on critical minerals as a national security pressure point has continued unabated. There have been several White House and legislative initiatives designed to bolster US economic and national security in this area – animated by the watchwords of deregulation, investment and funding. Some of these initiatives include:

• A "Day One" Executive Order — EO 14154, Unleashing American Energy (Jan. 20, 2025) – which set out a policy to establish the US as the "leading producer and processor of non-fuel minerals, including rare earth minerals, which will create jobs and prosperity at home, strengthen supply chains for the United States and its allies, and reduce the global influence of malign and adversarial states." To effect this policy, President Trump directed all federal agencies to identify any regulations, orders, guidance documents or other policies that "impose an undue burden on the identification, development, or use of domestic energy resources—with particular attention to oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources."
• Similarly, EO 14241, Immediate Measures to Increase American Mineral Production (March 20, 2025), was designed to streamline the minerals permitting process to promote US mineral production. Relying on the Defense Production Act of 1950 (DPA), the EO directed the Secretary of Defense to use the National Security Capital Forum (a convening organisation for finance experts, capital providers, investors, entrepreneurs and others to exchange information on potential transactions to support US national security interests) to "facilitate the introduction of entities to pair private capital with commercially viable domestic mineral production projects to the maximum possible extent." Among other initiatives, EO 14241, again relying on the DPA's authority, required the US International Development Finance Corporation, in consultation with the US Departments of Defense, Energy and Interior as well as the National Energy Dominance Council (NEDC), to extend loans to "create, maintain, protect, expand, or restore" domestic mineral production. For its part, NEDC was authorised, with the relevant federal agencies, to identify priority projects and "take all necessary or appropriate actions within the agency's authority" to expedite and issue relevant permits.
• Continuing the White House focus on critical minerals, President Trump issued a formal Presidential Memorandum calling for better coordination between US federal agencies to ensure prompt review of funding applications for energy infrastructure and critical mineral/material projects.³ Agencies were directed to share with the NEDC information regarding applications for funding and existing funding commitments of their respective agencies, and to develop a "common application" for federal energy and critical mineral funding opportunities – all of which was designed to enable the US government to make "faster" and, in the Administration's view, "better" funding decisions.
• Legislatively, the One Big Beautiful Bill Act (OBBBA) modified the Section 45X advanced manufacturing tax credit and imposed a phase-out schedule for that credit, initially established under the Inflation Reduction Act to promote US production of renewable energy components and critical minerals. This credit begins to phase out in 2031 and ends as of the start of 2034. "Metallurgical coal" was added to the critical minerals list for the purposes of the Section 45X credit (though this ends after 2029). While this credit sunsetting may discourage the development of new longer-term projects, other OBBBA provisions should support the minerals industry. For example, the OBBBA authorised significant funding related to critical minerals, including (i) US$ 2 billion allocated towards improving the US stockpile of critical minerals through the National Defense Stockpile Transaction Fund; (ii) US$ 5 billion for investments in critical minerals supply chains made pursuant to the Industrial Base Fund; and (iii) US$ 500 million for Defense Credit Programs for critical minerals and related industries and projects.

A summary of the investment trends

The US government is using Direct Government Funding and Public-Private Partnerships(PPP) to increase the security of critical mineral supply to US industries. We have seen the Energy Department, the Defense Department, and other US agencies make direct grants of loans to miners, noting for example, the Energy Department restructuring of a US$ 2.3 billion loan agreement with Lithium Americas, the landmark deal with MP Materials in July 2025, and the 10% equity stake secured in Trilogy Metals. Recently announced PPPs have included the agreement between Orion Resource Partners and the US Government (via the US International Development Finance Corporation) to establish a US$ 5 billion critical minerals fund and the announcement that the Trump administration will enter a strategic partnership with Pinnacle Asset Management and Atlantic Alumina, taking a US$150 million equity stake in the $450 million development of a gallium production facility in the US.

State investment in miners is not unusual, but the US government is taking an increasingly sophisticated approach to securing critical mineral supply. The Lithium Americas deal included not only a 5% equity stake in the miner, but an additional separate 5% equity stake in the Thacker Pass lithium project. The deal with MP Materials, on the other hand, utilised a 10-year price floor offtake contract, with a view to de-risk the project. While the Trilogy Metals deal was a singular equity stake, this represented a move to shore up international miners' investments into projects in North America, with Trilogy Metals looking to develop a project in Alaska.

These investment trends are supported by international agreements that ally the US with historically pre-eminent mining nations, with recent frameworks agreed with Australia and Japan. We are also seeing moves to create framework agreements with nations with high exploration potential, such as Kazakhstan.

Potential for further US government offtake agreements

As noted above, the landmark multi-billion-dollar PPP announced in July 2025 between MP Materials and the US Department of Defense included a 10-year price floor offtake contract, with a view to de-risk the project.

Under an offtake agreement, a buyer (the off-taker) agrees to buy all or a substantial portion of a resource producer's future output from a project. Such an arrangement is often entered into before project construction in order to secure a revenue stream to support the project financing and reduce the resource producer's risk of being unable to secure a market for the future output. Long-term offtake agreements are fundamentally important instruments in high-risk industries like mining, which has high capital expenditures. They create a binding contract on the quantity and price of a producer's output, and as such, they help miners and exporters have more security over their revenue outlook. They can also include provisions on processing, technology, and ESG standards.⁴

The use of strategic offtake agreements is a model which has been in several jurisdictions for many years. By way of example, the "Japanese model" has traditionally relied on the use of offtake agreements, in tandem with equity investments, to secure supply chains for strategic commodities. More recently, state-owned entities in the Kingdom of Saudi Arabia have deployed this strategy (consistent with the Kingdom's mining strategy, a "key pillar" of its Vision 2030 strategy) to develop its mineral supply chain. This mechanism not only secures supply from a specific project or entity, but it also makes investment into miners and/or specific projects more attractive, which could be a key strategic move both for the Trump Administration and the EU. In that context, European Commission (EC) Industry Commissioner Stéphane Séjourné stated in a post on social media that: "the Commission will create a joint purchasing and strategic stockpiling centre for critical raw materials, inspired by the Japanese model."

Furthermore, the increased use of offtake agreements by the US government is likely to work in tandem with the ongoing trend in offtake agreements directly between Original Equipment Manufacturers (OEMs) in the automotive and defense sectors and miners. In combination, these two trends could see the US make significant progress towards localising and controlling its supply chain for key industries.

Europe's approach: financing and global partnerships

The EU is pursuing its own strategy to protect the Single Market and boost supply chain resilience. Rather than seeking direct ownership, Brussels is leveraging the European Investment Bank (EIB) to channel billions into mining, processing, and recycling projects. In March 2025, the EIB pledged to double its financing for critical raw materials (CRMs), aiming to meet 25% of the EU's demand through recycling by 2030. More specifically, the new initiative included an expected €2 billion financing for CRM investment in 2025, a new CRM Task Force and a dedicated one-stop shop to build and manage a pipeline of CRM operations and advisory activities and increased technical expertise and partnerships.

Furthermore, since July 2024, the EU and the European Bank for Reconstruction and Development (EBRD) signed, under the InvestEU umbrella, an agreement on a new facility providing equity investments for the exploration for critical and strategic raw materials, aiming to mobilise around €100 million in investments. The new joint facility was intended to support the objectives of the EU Critical Raw Minerals Act and the REPowerEU Plan. The EU contribution amounts to €25 million from the Horizon Europe Programme. Another €25 million is provided by the EBRD, and the joint facility aims to leverage a further €50 million.

In March 2025, the EC adopted, for the first time, a list of 47 Strategic Projects to boost domestic strategic raw material capacities, which will in turn strengthen the European raw materials value chain and diversify sources of supply. The Strategic Projects cover 14 of the 17 strategic raw materials listed in the EU Critical Raw Minerals Act. These projects will ensure that the EU can fully meet its extraction, processing and recycling 2030 benchmarks for lithium and cobalt, while making substantial progress for graphite, nickel and manganese. Moreover, other strategic projects involving magnesium (1 project) and tungsten (3 projects) will contribute to the resilience of the EU's defence industry, which relies on the use of these materials.

To become operational, the 47 Strategic Projects have an expected overall capital investment of €22.5 billion. These projects will be able to benefit from coordinated support by the EC, Member States of the EU and financial institutions to become operational, notably regarding access to finance and support to connect with relevant off-takers. They will also benefit from streamlined permitting provisions, to ensure predictability for project promoters while safeguarding environmental, social and governance standards.

In June 2025, several other projects located in third non-EU countries were also recognised as Strategic Projects under the EU Critical Raw Minerals Act. They were assessed in light of their contribution to the security of the EU's supply of strategic raw materials, technical feasibility, sustainable implementation, and whether it is mutually beneficial for the EU and the emerging market or developing economy third country concerned by adding value therein. Ten of these Strategic Projects concern strategic raw materials essential for electric vehicle, batteries and battery storage, like lithium, nickel, cobalt, manganese and graphite. Two Strategic Projects cover the extraction of rare earth elements, which play a key role in producing high-performance magnets used in wind turbines or electric motors for renewable energy technologies and electro mobility. Combined with the three Strategic Projects in the EU that cover the processing of rare earths, these additional Strategic Projects will be able to increase the EU's security of supply of rare earths. Strategic Projects also cover copper, used from power-grid to microelectronics, tungsten, and boron, used in the automotive, renewable energy, aerospace and defence sectors.

It is estimated that the 13 Strategic Projects outside of the EU need an overall capital investment of €5.5 billion to start operations. The EC will also reinforce cooperation with the third countries concerned to ensure the development of those projects, especially through the Strategic Partnerships already concluded with some of these countries on raw materials value chains. More investments are expected to follow as the EU launched its second call for strategic projects under the EU Critical Raw Minerals Act (with applications to be received by 15 January 2026).

Furthermore, the very recently adopted RESourceEU Action Plan sets out a €3 billion investment drive to accelerate the EU's CRM Strategy and reduce strategic dependencies. It focuses on de-risking and scaling projects in extraction, processing, and recycling through a new European Critical Raw Materials Centre, a CRM financing hub, and coordinated EU instruments such as InvestEU and the Innovation Fund. Supported by EIB and EBRD financing and international partnerships, the plan aims to operationalise priority projects by 2029, streamline permitting, and promote circularity, creating a resilient and competitive EU market for critical raw materials. According to Stéphane Séjourné, EC's industry commissioner, "the funding of €2 billion would be allocated through the EIB; €300 million would come from the Battery Booster programme and €600 million from Horizon Europe programme". In light of ReSourceEU's launch, financial support for two priority projects was also announced. Vulcan Energy's Germany lithium extraction (and geothermal power) project will receive €250 million from the EIB. Greenland Resources' molybdenum mine in Malmbjerg, which could satisfy a quarter of the EU's total molybdenum demand, is also expected to receive EIB financing.

Europe is constantly looking beyond its borders to diversify its supply chains to the greatest extent possible. Negotiations are underway for equity stakes and offtake agreements in Australian lithium and rare earth projects, backed by EIB and national development banks. As EIB Vice-President Nicola Beer said: "Teaming up with Australia will provide the type of win-win partnership we are eager to build: a partnership with a like-minded actor – one that engages communities, values transparency and ensures community trust in critical raw materials initiatives. Australia's strong track record in environmental responsibility and sustainable mining aligns with the EIB's commitment to innovation and green investments. In this way, we strengthen Australia's and Europe's strategic autonomy." In Africa, the EU signed a Clean Trade and Investment Partnership with South Africa, committing €750 million to infrastructure and mineral development. Unlike past extractive models, this agreement emphasises local processing, aiming to build integrated value chains rather than exporting raw materials.

FDI challenges for miners and industry participants

In the US, given the intersection of critical minerals and US national security, any acquisition of or investment in US critical mineral businesses, assets or operations by a foreign (non-US) person may be subject to review and approval by the Committee on Foreign Investment in the United States (CFIUS), the US government's foreign direct investment (FDI) regulator. CFIUS is tasked with reviewing "covered transactions," i.e., controlling acquisitions of or certain non-controlling investments in a US business by non-US persons, to assess whether the transaction could impair US national security.

CFIUS's remit is sector agnostic. Initially focused on the traditional defense and aerospace sectors, CFIUS has jurisdiction over and can take an interest in essentially any covered transaction. While there is no country-specific deny, restrict or grant list, in practical terms investors from what the US government deems "countries of concern" (in particular, China, including Hong Kong) tend to receive higher CFIUS scrutiny, particularly where the US target operates in the critical technology, critical infrastructure and/or sensitive personal data arenas. CFIUS enforces a mandatory filing regime for certain transactions (often involving export controlled critical technologies or investments by state-owned entities). In addition, deals that do not trigger mandatory filing requirements, but which likely present US security concerns, are often filed to CFIUS on a voluntary basis, since absent a filing, review and clearance, CFIUS retains the legal authority to investigate and call in transactions, and block, unwind and/or impose mitigation conditions (undertakings) on transactions subject to its jurisdiction that may present US national security risks. Potentially relevant to critical minerals, CFIUS also has jurisdiction over certain real estate transactions where the property in question is located near a US military site or other sensitive government installations.

Given the foregoing, parties to any acquisition of or investment in a US minerals operation by a non-US person must assess whether the specifics of the deal will raise material US national security concerns. Indeed, a Biden-era Executive Order⁵ expressly directed CFIUS to consider the impact of proposed transactions, including in the critical minerals space, on US supply chain resilience with respect to the US defense industrial base but also to the US economy more broadly. Overall, while not an insurmountable hurdle, especially for acquirers or investors from US ally and partner nations, CFIUS can be a pressure point in any US-focused minerals transaction (making early planning and assessment a necessity).

CFIUS jurisdiction, while very broad, is not all encompassing. That said, where a potential transaction does not involve US entities or assets and thus lies outside CFIUS's orbit, the Trump Administration can (and does) use other levers to pursue its national and economic security goals, including diplomatic pressure, trade controls (e.g., tariffs and economic sanctions), export controls, and investigative measures. For example, President Trump deployed such measures in April 2025 with respect to critical minerals, when he ordered the US Department of Commerce to initiate an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security effects of processed critical minerals imports.⁶ This followed a February 2025 order directing the Commerce Department to investigate the risks of the US's "increasing dependence on foreign sources of copper" as well as the potential need for trade remedies to safeguard US industries⁷, which investigation ultimately led to the imposition of a 50% tariff on imports of semi-finished copper products.⁸

Regardless of whether President Trump's tariff program ultimately yields to the legal challenge at the US Supreme Court, critical mineral stakeholders should expect that the Trump Administration will continue to use the levers remaining at its disposal to strengthen US supply chains and enhance US industrial and security resilience.

In the EU, the current EU FDI Regulation does not provide for a harmonised regime. A cooperation mechanism is in place between the screening EU Member State, the EC and other EU Member States, with the ultimate decision on the screened transaction still belonging to the screening EU Member State. The EU FDI Regulation contains a non-binding and high-level list of sectors in which EU Member States "may" consider screening investments. More specifically, under Article 4(1)(c) of the EU FDI Regulation, in determining whether a foreign direct investment is likely to affect security or public order, EU Member States and the EC may consider its potential effects on the supply of critical inputs, including energy or raw materials.

The ongoing review process of the EU FDI Regulation is expected to bring changes to the regime by introducing mandatory FDI screening for sectors such as critical minerals as well as enhanced powers for the EC. The EC Proposal sought to transform the indicative list of sectors giving rise to national security concerns into a mandatory list requiring EU Member States to screen investments in the listed sectors. The EC Proposal listed these sectors in two annexes: Annex I, which referred to "programs of Union interest" (i.e. EU-funded programs in areas deemed particularly strategic such as defense, space, telecoms, health); and Annex II, which contained a list of technologies and products covering 12 sectors, that did not include critical minerals. The European Parliament proposal, however, proposed expanding that list by adding 5 new sectors among which critical raw materials (including extraction, refining, recycling and storage).

In December 2025, political agreement was reached between the European Parliament and Council to tighten FDI screening across the EU, introducing mandatory screening mechanisms, a minimum mandatory scope for screening, broader coverage of indirect foreign control and harmonised rules, maintaining however, EU Member States' discretion over final screening decisions. Under the revised framework, all EU Member States must screen foreign investments in a clearly defined set of sensitive areas, including among other critical raw materials. On a national level, most EU Member States have already implemented FDI screening regimes that capture critical minerals as part of a broader sector with national security implications.

Future outlook

US government support for initiatives that will increase US critical mineral production and supply, especially as a counterweight to China's lead in this area, will continue for the foreseeable future.

Indeed, these efforts have current legislative support. For example, the Critical Mineral Dominance Act (H.R. 4090) would, if enacted, require the Interior Secretary to identify priority mining projects and federal land on which the exploration, construction, or operation of those projects "(1) can most quickly be fully permitted and operational; and (2) would have the greatest potential effect on the robustness of the domestic mineral supply chain." Likewise, the Revitalizing America's Offshore Critical Minerals Dominance Act (S. 2860) would expedite the process for licensing offshore mineral projects and expand the US's offshore extraction of critical minerals, to establish the US as a "global leader in responsible seabed mineral exploration," create a "robust domestic supply chain" for critical minerals derived from seabed resources, and strengthen "partnerships with allies and industry to counter the growing influence of China over seabed mineral resources." The proposed Rare Earth Magnet Security Act of 2025 (S. 1979 / H.R. 1496), for its part, would provide production tax credits for rare earth magnets manufactured or produced in the United States.

The Trump Administration's final 2025 list of critical minerals highlights the importance of rare earth elements, "whose supply disruption would impose the highest cost on the U.S. economy, which are essential to technologies like smartphones, hard drives, and advanced defense systems."⁹ The list added ten new minerals – boron, copper, lead, metallurgical coal, phosphate, potash, rhenium, silicon, silver, and uranium.  These "critical" designations give the Administration more room to impose trade measures, including in respect of copper whose refining capacity is dominated by China, and to direct more federal funding to the development of US capabilities for these now officially "critical" minerals. In addition, although oil has headlined the coverage of the recent US operations in Venezuela, some wonder whether the Trump Administration also will seek access to the country's critical mineral reserves, perhaps via an agreement with the new Venezuelan government.

Ultimately, we expect the US government will continue to give priority consideration – in the form of reduced permitting and other regulatory hurdles, increased funding support, tax credits, and continued direct investment – to areas and entities that will advance the Trump Administration's goals of onshoring critical mineral production and ensuring reliable critical mineral supply chains to meet US economic and national security needs. This will undoubtedly result in more, and perhaps more expansive, funding and development opportunities for US industry stakeholders as well as those in US allied nations.

Looking across to the EU, Brussels is expected to continue to focus on global diversification and systemic resilience through financial incentives and regulatory influence. Development banks such as the EIB and EBRD will play a central role, channelling capital towards projects that expand supply options and promote green technologies. The EU strategy will also continue to emphasise circular economy practices, setting ambitious recycling and resource efficiency targets to reduce dependence on primary materials. Furthermore, the EU will try to leverage its regulatory power to export sustainability standards globally, embedding ESG requirements and carbon footprint norms into trade and investment frameworks. This approach reflects a philosophy of resilience through interdependence, spreading risk across multiple actors while shaping global norms in line with European values.

Furthermore, in light of the ReSourceEU Plan, the EC is proposing targeted amendments to the EU Critical Raw Minerals Act in order to streamline, clarify and simplify some of the rules to improve circularity, in order to increase recycling capacity and to strengthen the secondary market for CRMs. The amendments seek to strengthen the resilience of EU industrial sectors manufacturing strategic technological products with strategic raw materials, a subset of CRMs. Furthermore, the imminent need to quickly increase production of CRMs requires the expansion of the circularity framework to increase the recovery and the reuse of critical raw materials, particularly for rare earth permanent magnets. Lastly, the EC is proposing to introduce additional flexibility in the number of calls required per calendar year for the designation of Strategic Projects, given the high number of applications per call and the need to ensure a coherent assessment of each application. The amendments contained in the proposal will ensure resource efficiency and support the secure and sustainable supply of CRMs. At the same time, the amendments will support the clean and digital transformation, by ensuring availability of essential resources used by industries of various sectors.

Why it matters

We are seeing a paradigm shift in resource security. By adopting strategies such as direct investments and strategic offtake arrangements, Western governments are reshaping global supply chains for critical minerals. As demand for battery metals and rare earths surges, these strategies will not only determine who controls the raw materials of the future but also who leads the clean energy transition.

From a practitioner's standpoint, this shift signals a new operating environment where policy risk and industrial strategy become as important as price and logistics. Companies can no longer rely solely on market forces; they must anticipate government interventions, navigate evolving standards, and align with strategic financing mechanisms. For investors and operators, success will hinge on the ability to secure long-term offtake agreements, comply with sustainability benchmarks, and build partnerships that reflect geopolitical priorities. In short, resource security is no longer a passive condition, it is an active, competitive domain where public and private actors converge to shape the future of energy and technology.

Footnotes

1. See Executive Order (EO) 14272, Ensuring National Security and Economic Resilience Through Section 232 Actions on Processed Critical Minerals and Derivative Products (April 15, 2025).

2. See, e.g., EO 13953, Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting the Domestic Mining and Processing Industries (Sept. 30, 2020).

3. See Presidential Memorandum, Simplifying the Funding of Energy Infrastructure and Critical Mineral and Material Projects (June 30, 2025).

4. International Institute for Sustainable Development Report, International Trade and Investment Agreements and Sustainable Critical Minerals Supply, International Institute for Sustainable Development, Canada, April 2025, p.2, available at: https://www.iisd.org/system/files/2025-04/trade-investment-agreements-critical-minerals.pdf.

5. EO 14083, Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States (Sept. 15, 2022).

6. See EO 14272 (discussed above).

7. See EO 14220, Addressing the Threat to National Security From Imports of Copper (Feb. 25, 2025).

8. See Presidential Proclamation 10962, Adjusting Imports of Copper Into the United States (July 30, 2025).

9. See US Geological Survey, Interior Department releases final 2025 List of Critical Minerals (Nov. 14, 2025).

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